Tuesday, November 22, 2016

End London’s role as a clearing-house for dirty money

"London, that great cesspool into which all the loungers and idlers of the Empire are irresistibly drained" was what Sherlock Holmes’s companion, Dr Watson, thought of the capital. Well, this week a cross-party coalition of MPs will be trying to drain the mire of its dirtiest elements.

The government’s criminal finances bill, with its crackdown on unexplained foreign wealth, secretive shell companies and high-level tax evasion, is a smart attempt to end London’s culture of money-laundering. But if we are really going to stop the capital’s property being used as a reserve currency by global kleptocrats, we have to go further. For London’s historic place at the heart of the empire has endowed it with the networks and skills, from the Square Mile to Caribbean tax havens, to become one of the world’s leading hubs for the dispersal and camouflaging of dubious funds.

In the late 19th century, as the scramble for Africa extended the British empire, London’s banks and accountancy firms funnelled cash around the colonies. Joseph Chamberlain called the City “the clearing-house of the world”, financing mining in New South Wales and tea plantations in India. In EM Forster’s Howards End, Henry Wilcox is said to have the “colonial spirit” as he successfully enriches himself at the Imperial and West Africa Rubber Company. With the capital flowed the ships and steamers out of the Thames, sitting on board one of which was Joseph Conrad’s traumatised Marlow, with his Congo tales of venturing “into the heart of an immense darkness”. (more...)